U.S. stocks rose on Wednesday, and while some investors focused on the U.S. Labor Department’s downward revision to earlier job growth numbers, three major retail names saw big moves: Target (TGT), Macy’s (M) and JD.com (JD).
Goal
Target shares rose as much as 12% after the company reported better-than-expected second-quarter results, beating Wall Street expectations for earnings and revenue. Gross profit margins rose to 28.9% from 27% a year earlier.
The retail giant also saw a 3% increase in foot traffic at its stores during the quarter after dramatically slashing prices on 5,000 everyday items over the summer – items where Target was losing market share to rival Walmart (WMT).
The Minneapolis-based company has since announced that it is meeting its inventory reduction targets, which could be due to theft, damage or poor accounting, among other things.
As Brooke DiPalma reports, CFO and COO Michael Fiddelke said in a call with reporters that the company had reached a plateau in terms of shrinkage, including shoplifting.
“(Inventory shrinkage) was one of the tailwinds to earnings this quarter, and our goal at the beginning of the year was to keep inventory shrinkage at a plateau and thus recover from the deterioration we have experienced over the last few years. After two quarters, we have achieved that and then some,” Fiddelke said.
Macy’s
Macy’s shares fell as much as 12 percent after the company posted another quarter of declining sales, a month after rejecting a $6.9 billion takeover bid. The retail chain reported a 3.8 percent year-over-year decline in net sales to $4.9 billion, below Wall Street expectations of $5.06 billion. Store sales also fell 4 percent.
This quarterly report comes more than a month after the company ended talks about a potential takeover offer from one of its shareholders, Arkhouse, and its partner Brigade Capital Management.
Macy’s CEO Tony Spring, who took over the position in February, laid out a strategy earlier this year that includes closing low-revenue stores, improving the remaining “go-forward” locations and investing in digital sales.
JD.com
JD.com shares fell as much as 5% in U.S. trading after Walmart sold its stake in the Chinese e-commerce giant, raising about $3.6 billion, according to Bloomberg. In Hong Kong, JD.com shares plunged 12%.
The sale of the shares ends an eight-year partnership between the two companies amid a difficult economic situation in China. The economic landscape is affected by a falling real estate market, high youth unemployment and trade tensions between Washington and Beijing.
Chinese technology stocks, including Alibaba (BABA), have yet to fully recover after policymakers reversed course following a crackdown on the sector in 2022.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X at @ines_ferre.
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